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Greece Moves to Subsidize Out-of-Control Electricity Prices

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Finance Minister Christos Staikouras. (Photo by Eurokinissi)

ATHENS – Greece's New Democracy government will pile subsidies for soaring electricity costs on top of fuel oil heating aid for the most vulnerable in a bid to rein in a suddenly chaotic energy market that has spread everywhere.

The government, which in 2020 alone gave 17.5 billion euros ($20.24 billion) into aid for laid-off workers and their businesses shut down for months during lockdowns aimed at slowing the spread of COVID-19.

The electricity subsidies will total 500 million euros ($578.36 million,) said Kathimerini in a report on how the government is scrambling to try to rein in the runaway costs that have hit consumers hard during the linging pandemic.

“In this unprecedented energy crisis, we will not leave anyone unprotected,” said Environment and Energy Minister Costas Skrekas at a joint press conference with Finance Minister Christos Staikouras and Deputy Finance Minister Theodoros Skylakakis.

The discount on electricity bills will double to 18 euros ($20.82) per month for an average household, reaching up to 24 euros ($27.76) – which won't make a dent for most whose bills despite subsidies could be out of reach.

A further increase in aid is not ruled out, if necessary, the ministers said as the government said it would raise the income criteria as well for heating oil, natural gas, LPG, pellets, and firewood to include more than 1 milion households.

The allowance will be increased by 36 percent for households without children to 68 percent for households with three children and the average increase of the subsidy for a family of four is 59 percent.

The minimum subsidy will rise to 100 euros ($115.67) from 80 euros ($92.54,) while the maximum from 650 euros ($751.87) to 750 euros ($867.54) the report added. It wasn't said how it will be financed although Greece is getting 32 billion euros ($37.02) in COVID aid from the European Union in loans and grants.

A price crisis is coming for natural gas too, with the costs already prohibitive for many industries who are shutting down across Europe because they can't afford the bills for the product, the paper said.

On Oct. 29, nine energy state regulators from countries in Southern Europe will meet in Athens on an initiative by the Greek and French regulators how to deal with the jumping costs for gas – much it coming from Russia, which holds the EU hostage through the needed commodity.

Greece and Bulgaria, which have a common operation status, are among Europe’s most expensive, as are Serbia and Croatia, while Malta and Cyprus constitute a separate category as they are not connected to the European grid.